Jan 27 (Reuters) - Canadian wood panels maker Norbord Inc posted a fourth-quarter loss, hurt in part by low oriented strand boards (OSB) prices, but said the North American housing market was improving.

Norbord, which produces OSBs that are commonly used to sheath roofs, walls and floors, has been grappling with high raw material costs and a weak U.S. housing market.

However, the company sees a brighter North American housing market in 2012. “Early indicators suggest some upside in both demand and price in North America as we move into the first quarter of 2012,” Chief Executive Barrie Shineton said in a statement.

The seasonally-adjusted U.S. housing starts for December was 657,000, up 25 percent from last year’s year-end pace, the company said.

Housing starts, including multifamily homes, were up about 3 percent in 2011, but single family homes fell 9 percent, Norbord said.

Toronto-based Norbord, whose peers include West Fraser Timber and Tembec Inc, however, expects overcapacity to continue to weigh on North American OSB markets.

Norbord, which also makes plywood and other engineered wood products, said it expects its European business to remain robust in 2012, despite panel pricing having peaked.

For 2012, the company is planning capital investments at the same $25 million level, but said it can be constrained to $15 million if market conditions warrant.

For the October-December quarter, net loss was $9 million, or 21 cents a share, the same as the year-ago quarter.

Analysts, on average, were expecting a loss of 8 cents a share, on revenue of $242.7 million, according to Thomson Reuters I/B/E/S.

EBITDA in the fourth quarter was $9 million, compared with $14 million in the year-ago quarter.

North Central benchmark OSB prices were flat at $190 per thousand square feet on an average.

Norbord shares, which have gained a fourth of their value so far this year, closed at C$10.04 on Thursday on the Toronto Stock Exchange. (Reporting by Shounak Dasgupta and Bhaswati Mukhopadhyay in Bangalore; Editing by Supriya Kurane)